Prepare dividend entries, prepare a stockholders’ equity section, and calculate ratios.

(LO 4, 5, 6)

 

  P11-4B On January 1, 2014, Lamar Corporation had these stockholders’ equity accounts.Common Stock ($20 par value, 80,000 shares issued and outstanding)     $1,600,000

Paid-in Capital in Excess of Par Value                                                          240,000

Retained Earnings                                                                                      750,000

During the year, the following transactions occurred.

Feb.      1     Declared a $1.00 cash dividend per share to stockholders of record on February 15, payable March 1.

Mar.      1     Paid the dividend declared in February.

July      1     Declared a 15% stock dividend to stockholders of record on July 15, distributable July 31. On July 1, the market price of the stock was $25 per share.

           31     Issued the shares for the stock dividend.

Dec.      1     Declared a $1 per share cash dividend to stockholders of record on December 15, payable January 5, 2017.

           31     Determined that net income for the year was $500,000. The market price of the common stock on this date was $32.

Instructions

(a) Journalize the transactions. (Include entries to close net income and dividends to Retained Earnings.)

 

(c)  Total stockholders’ equity $2,918,000

 

  (b) Enter the beginning balances and post the entries to the stock-holders’ equity T-accounts. (Note: Open additional stockholders’ equity accounts as needed.)(c) Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.

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Status NEW Posted 09 May 2017 12:05 AM My Price 10.00

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